Fairfield County continues to be a competitive real estate environment, garnering business relocations within towns, the county and the state, with deals being made and confidence on the rise as the economy stabilizes.
“In Fairfield County there has been a surge of restaurants opening, especially in places like Greenwich and Fairfield,” said Ronald Brien, director of commercial leasing at M.H. Heaven Real Estate, a commercial real estate brokerage firm on Greenwich Avenue in Greenwich. “Private equity firms and hedge funds also are continuing to open and seek new corporate headquarters.”
Brien said law firms, accountants and most other professional services industries are stable, but are not readily expanding in terms of space.
Renewals of confidence were reflected in long-term deals being done in Stamford like the National Indemnity Co., a property insurance firm, which renewed its lease commitment for 17,000 square feet at First Stamford Place for the next 10 years.
Cushman & Wakefield”™s third-quarter report for the New York Metro Region commercial real estate market reflected investment activity up strongly year over year.
“The increase in investment activity year-to-date is significant for the market overall, despite the fact that last year set an extremely low benchmark,” said Joseph Harbert, chief operating officer of Cushman and Wakefield for the New York Metro Region. “What this level of activity suggests is that investors have taken note of improving market fundamentals.”
Commercial vacancies at about 20 percent
The commercial vacancy rate in Fairfield County has been reported most recently by Choyce Peterson in Stamford as about 20 percent.
“For Fairfield County, I think we hit bottom as far as office space goes this summer,” said Sean Cahill, senior vice president of CB Richard Ellis in Stamford. “In terms of levels of activity we”™re seeing landlords being able to hold out a little bit more for price. If you go back to 2008 and 2009, it was pretty much lights out for a while.”
Cahill said the area”™s real estate market has paralleled that of the main industry of Fairfield County, financial.
“Now you”™re seeing that market stabilize,” said Cahill. “You”™re seeing a lot of financial start ups with professionals who have left large institutions, and are out there starting new.”
Cahill said industrial leasing is starting to happen as well in terms of high-tech lab companies mostly coming out of New Jersey.
“This industrial space activity that we”™ve seen has surprised us,” said Cahill.
The owners of the former Clairol headquarters on Blachley Road signed a lease with Chelsea Piers Connecticut (full story, Page 10), to bring a sporting complex, much like the one that straddles the West Side Highway in Manhattan. The lease is for 350,000 square feet at the 32.68-acre campus, which was purchased in March by a partnership between Steven Wise Associates, Norwalk-based Spinnaker Real Estate Partners and the Connecticut Film Center The partnership paid Clairol about $17 million and have a plan to create a film, television and video production studio at the 770,000-square-foot location.
Largest relocations are with offices
The largest deals done this year to date have all been relocations in the office sector with Starwood Hotels relocation from White Plains being number one at 270,000 square feet, Nestle Waters being second at 164,000 square feet and GE Asset Management at 158,000 square feet.
Cahill said properties, like the former Nivea location currently on the market Martin Luther King Drive in Norwalk, are offering interested parties unique real estate propositions in the current market.
“There”™s life out there,” said Cahill.
Brien said a surge in gyms and personal fitness businesses are in those locales as well.
“Since late spring this year, there has been a surge of renewed interest by national retailers as well as local and regional brands,” Brien said. “Darien has also become a hot town for retail. You see space filling up there as well.”
Brien said demand for retail space on Main Street in Westport will remain strong, having had some major leases earlier this year.
“There we will see very little turnover,” said Brien. “One needs to remember that Greenwich Avenue is four times larger than Main Street in Westport, Elm Street in New Canaan and the Post Road in Darien. Another hot town is Fairfield. It seems like it”™s the ”˜in”™ place right now for retailers and restaurants.”
Brien said prospective business tenants looking to Fairfield from out of county or out of state, whether office or retail, are continuing a constant hunt for value. He said tenants still live in an environment where they can feel they made a good deal.
“You see a lot coming out of the pent up demand of what didn”™t happen in 2009,” said Christian Bangert, vice president of Rhys commercial real estate in Stamford. “The motion in the market is tremendous compared to last year, which isn”™t exactly saying much, but it”™s definitely positive.”
Bangert said industries that are showing confidence and taking advantage of a favorable sublease market are financial advising, energy trading and banks.
“I would say 75 pecent of the deals that are out there are downsizing square footage in some fashion,” said Bangert.
Bangert called the medical and major growth field in terms of real estate. Rhys has recently opened a division specifically for healthcare real estate services. Sean McDonnell, formerly an in house employee for Norwalk Hospital, is heading up the division.
“That”™s an industry we see constantly growing,” said Bangert.
